“If they have failed to prosper despite all the excellent advice, it is because something is the matter with them: They missed the Protestant Reformation, or they are crippled by the disabling legacy of colonial Europe, or their IQs are too low. But the suggestion that it is culture that explains the success of such diverse places as Japan, Switzerland, and California, and culture again that explains the relative poverty of such equally diverse places as China, Estonia, and Baja California, is worse than inhumane; it is unconvincing.” Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else By Jen-ching Kao Here are four stories about four men who are much richer than 99.99% of Americans, Europeans, and the rest of the world. Three of them grew up in families which were poorer, and perhaps more miserable than ours; two of the countries they come from have much lower GDP per capita than Taiwan’s; three of them never completed university studies. So, is it merely luck that makes them who they are today or is there extraordinary wisdom which allows them to maximize and optimize whatever they can gain from their environment? Ingvar Kamprad—A Frugal Capitalist Who Sells at Low Cost Country of Citizenship: Sweden Age: 81 Fortune: Self-made Source: IKEA Net worth: US$33 billion (estimated by Forbes in March 2007) Worldwide Rank: 4 Born in 1926, raised on a farm named Elmtaryd, near the village of Agunnaryd, Kamprad embarked on business as a teenager. He first purchased matches in bulk from Stockholm at a very low price and peddled them by bicycle in his neighborhood with a satisfactory profit. Later he reinvested the profits and expanded his business to selling Christmas cards and decorations, fish, pens, and other items. At the age of 17, his father awarded him some money for succeeding at school. This was when Kamprad gave birth to IKEA (Ingvar Kamprad Elmtaryd Agunnaryd), which sold many more daily products such as stockings, wallets, etc. IKEA has an intricate corporate structure and its profits go directly to the nonprofit INGKA Foundation and other shell corporations for tax avoidance, as Sweden is a welfare state which has tax revenue of more than 50% of its GDP. Kamprad is known for his frugality; he usually takes the subway to work and rarely wears suits; he encourages his employees to write on both sides of paper. On the other hand, IKEA has a highly active partnership with UNICEF and participation in local causes in different parts of the world. However, as the INGKA Foundation is headquartered in the Netherlands, it is not required for them to publish detailed records of their donations to charity. The incipient success of IKEA resulted from the fact that Kamprad was able to offer whatever he found a need for at a reduced price. Sweden’s major exports between the two World Wars included pulp, matches, and timber; forestry has always been one of Sweden’s largest industries and nearly 75% of Swedish farms have timberland. Young Kamprad took advantage Sweden’s economic strength and made profits from selling matches; later he caught the tide of Sweden’s competitive forest industry and first introduced furniture to IKEA in 1947. It was produced by manufacturers in forests near his home. Sheldon Adelson—A Philanthropic Entrepreneur Country of Citizenship: United States Age: 74 Fortune: self-made Source: casinos, hotels Net worth: US$26.5 billion (estimated by Forbes in March 2007) Worldwide rank: 6 Adelson is an American-born Jew whose parents emigrated to the US from the Russian Empire. As the son of a Boston cabdriver, he borrowed US$200 from his uncle to sell newspapers on street corners at the age of 12. Later he went to City College of New York and dropped out, then worked as a mortgage broker, an investment adviser, and a financial consultant. Adelson’s fortune soared in 1979, when he created the premier trade show for the computer industry, COMDEX (Computer Dealer’s Exhibition), in which he managed to rent space for 15 cents per square foot and to lease it to dealers for up to US$40 per square foot. In 1988 he and his partners bought the Sands Hotel and Casino for US$128 million and constructed the Sands Expo and Convention Center in Las Vegas. COMDEX was sold to Japan’s Softbank for US$862 million in 1995, and in 1996 the Sands was demolished and replaced by The Venetian, which was built at a cost of US$1.5 billion. There is also a chain hotel in Macau. As an American with Jewish heritage, Adelson has given generously to several programs targeted at Jewish Americans, such as US$25 million to the M. I. S. Hebrew Academy in Las Vegas to construct a high school, and US$25 million to Birthright Israel, which sponsors Jewish students’ trips to Israel. As the husband of a physician, he also contributes enormously to the Dr. Miriam and Sheldon G. Adelson Medical Research Foundation, and recently pledged billions to medical research. In 2007 Adelson founded Freedom’s Watch, which advocates support for Republican policies and is run by former officials of Bush administration. Roman Abramovich—A Powerful Oligarch Country of Citizenship: Russia Age: 40 Fortune: self-made Source: oil and gas Net worth: US$18.7 billion (estimated by Forbes in March 2007) Worldwide rank: 16 Orphaned by the age of three, since his mother died from a back-alley abortion and his father had been killed in a construction accident, Abramovich was raised by his uncle’s family and by his grandmother in Moscow. He dropped out of the Industrial Institute in Ukhta, Komi Republic, but later gained a correspondence degree from Moscow State Law Academy in less than a year. During Gorbachev’s incumbency in late 1980s, small private businesses were allowed; Abramovich sold rubber ducks, later started up an automobile parts cooperative, and eventually specialized in oil and oil products trade. His success was a result of teaming up with Boris Berezovsky, who was an oil magnate and has been a political refugee in Britain since 2000. In 1995 Berezovsky and Abramovich bid the largest oil company, Sibneft, at only a fraction of its book value in a controversial auction for privatizing Sibneft, and it was approved by Boris Yeltsin, who had close relationships with Berezovsky and Abramovich. After Yeltsin’s presidency, Berezovsky had strong political and financial disagreements with Vladimir Putin, so he sold Sibneft to Abramovich and fled to London to escape from fraud and political corruption charges. Abramovich was elected as a State Duma representative for Chukotka, a cold remote region located in northeast Russia with a population of 50,000, and in 2000, he won the election for the governor of Chukotka with nearly 100 percent of the vote. During his 6-year term he contributed his own money, as much as hundreds of millions of pounds sterling, in Chukotka to build and upgrade schools, hospitals, hotels, museums, etc. He used Chukotka as a tax haven for Sibneft, but he invested most of the tax savings in Chukotka’s construction. Birthrate and life expectancy in Chukotka have greatly increased and infant mortality has decreased by 50%. Critics of Abramovich’s political charity are convinced that he attempts to demonstrate his willingness to put the money he has earned from Russia’s natural resources back into the country in order to avoid charges of tax evasion; some also believe that large-scale construction projects in Chukotka are his aspiration to control the region’s natural resources and gain greater political power. Whether these assumptions are true or not, Abramovich is indeed a political oligarch, which in Russia is a near-synonym for a business tycoon. Mukesh Ambani—Born into Money Country of Citizenship: India Age: 50 Fortune: inherited and growing Source: petrochemicals Net worth: US$20.1 billion (estimated by Forbes in March 2007) Worldwide rank: 14 Dhirubhai Ambani was the second son of a Modh father who made a modest income by teaching at a school in Gujarat. He dropped out of school early and moved to Yemen at the age of 17 to seek more rewarding job opportunities, and he then entered the petroleum industry and gave birth to Mukesh. He returned to India in 1958 and established Reliance Commercial Corporation, which imported yarn and exported spices. As a risk-taker, Dhirubhai managed to convince middle class people to invest in his company and it soon expanded and diversified. Petrochemicals were the core of the company and textiles, telecommunications, technology, energy, and other areas were its additional specialties. Dhirubhai died in 2002. His two sons were the successors of Reliance Industries and it later split in 2005. Mukesh holds a Bachelor of Chemical Engineering from the University of Bombay. He attended the MBA program at Stanford University but failed to complete it for he had to run his father’s business. His younger brother Anil, who is now in charge of several sectors within the Reliance Group, has a net worth of US$32.4 billion as of October 2007, which makes him the 6th richest person in the world. He also earned a Bachelor of Science from the University of Bombay and an MBA from The Wharton School at the University of Pennsylvania. In November 2007, Mukesh initiated the construction of a new home on Altamount Road in Mumbai, a posh residential area where the Indian corporate elite gather. This 60-story building with only 27 livable floors inside is estimated to cost US$1 billion; it has six parking floors of 168 parking spots; Mukesh, his wife, his three children, and his mother are going to live near the top of the building with 600 domestic staff working downstairs. India is a poor country that features a drastically uneven distribution of wealth. The GDP per capita in India is US$3800; more than 31% of the wealth is possessed by only 10% of the population and more than 25% on Indians are living below the poverty line. The caste system has been banned since India’s independence. However, the mobilization between classes is so slow—because inter-caste marriages are often opposed by parents or grandparents—that people belonging to the upper castes today remain more privileged to get access to resources than the lower castes. It is acknowledged that political parties in India still manipulate caste solidarity to gain votes and that upper castes tend to be wealthy. For example, the Ambanis are Modhs, which is a sub-caste of Vaishyas, and the Vaishyas are the third caste responsible for commercial activities. Compared to the Shudras, who were born to serve the upper three castes almost as slaves and later became farmers and herders, Vaishyas have a much higher possibility to obtain power and wealth in India’s society. a
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May 2024
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